20 Microns Recommends ₹1.25/Share Dividend for FY25

20 Microns Limited has announced that its Board of Directors, in a meeting held on May 23, 2025, has recommended a dividend of ₹1.25 per ordinary share for the financial year ended March 31, 2025. Each share has a face value of ₹5. The proposed dividend is subject to the approval of shareholders at the company's Annual General Meeting (AGM) scheduled for Friday, August 8, 2025. If approved, the dividend will be paid within thirty (30) days from the date of the AGM.

Taxation of Dividend Income and TDS Implications

In a communication dated June 17, 2025, 20 Microns Limited informed its shareholders about the tax implications on the proposed dividend. Pursuant to the provisions of the Income Tax Act, 1961, as amended by the Finance Act, 2020, dividends paid or distributed on or after April 1, 2020, are taxable in the hands of the shareholders. Consequently, the company is required to deduct Tax at Source (TDS) at applicable rates on the dividend amount distributed.

Shareholders are urged to update their records, including tax residency status, PAN, email address, mobile number, and other relevant information. Shareholders holding shares in dematerialized form should update records through their Depository Participants. Those holding shares in physical form must provide updated details to the company's Registrar and Transfer Agent (RTA), Cameo Corporate Services Limited, via email at rani@cameoindia.com or by post to their Chennai office. These updates are crucial for accurate tax deduction and should be completed before the record date.

TDS Provisions for Resident Shareholders

For resident shareholders, tax will be deducted at 10% if a valid Permanent Account Number (PAN) is registered. If a shareholder does not have a PAN, has an invalid PAN, a PAN not linked with Aadhar, or has not registered their valid PAN, TDS will be deducted at 20% under Section 206AA of the Act or as per applicable law.

Exemptions for Resident Individuals:

No tax will be deducted for resident individuals if:

• The total dividend amount to be received during the Financial Year 2025-26 does not exceed ₹10,000.
• The shareholder provides a valid Form 15G (for individuals) or Form 15H (for individuals aged 60 years or above), provided all eligibility conditions are met. Templates for these forms are available as Annexure 1 and Annexure 2 in the company's communication.
• An exemption certificate issued by the Income-tax Department is provided.

Exemptions for Resident Non-Individuals:

No tax will be deducted for certain resident non-individuals who provide a self-declaration (as per Annexure 3 of the communication) and other specified documents. This includes:

• Insurance Companies: Self-declaration of 'Insurer' status (Section 2(7A) of Insurance Act, 1938) with beneficial interest, self-attested PAN, and IRDA/LIC/GIC registration.
• Mutual Funds: Self-declaration of SEBI registration and notification under Section 10(23D) of the Act, with self-attested PAN and SEBI registration certificate.
• Alternative Investment Funds (AIF): Self-declaration of income exemption under Section 10(23FBA), SEBI registration as Category I or II AIF, with self-attested PAN and AIF registration certificate.
• New Pension System (NPS) Trust: Self-declaration of NPS trust status, income exemption under Section 10(44), regulation under Indian Trusts Act, 1882, with self-attested PAN.
• Other Non-Individual Shareholders: Self-attested documentary evidence supporting exemption along with self-attested PAN.

If shareholders (individuals or non-individuals) provide a certificate under Section 197 of the Act for lower or NIL TDS, the rate specified in the certificate will apply upon submission of a self-attested copy.

TDS Provisions for Non-Resident Shareholders

As per Domestic Tax Law:

For non-resident shareholders, TDS will be applied at 20% (plus applicable surcharge and cess) on the dividend amount, as per Section 195 or Section 196D of the Act. If a certificate under Section 197/195 for lower/NIL TDS is provided, that rate will apply upon submission of a self-attested copy.

As per Double Tax Avoidance Agreement (DTAA):

Non-resident shareholders can opt for beneficial DTAA rates by submitting the following documents for the financial year April 1, 2025, to March 31, 2026:

• Self-attested copy of PAN card.
• Self-attested copy of Tax Residency Certificate (TRC) from their country's tax authorities.
• Mandatory online filing of Form 10F via the income tax portal (https://eportal.incometax.gov.in/).
• Self-declaration meeting treaty eligibility and beneficial ownership requirements (as per Annexure 4 of the communication).
• Copy of SEBI registration certificate for Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI).
• For Singapore tax residents, a letter or evidence demonstrating non-applicability of Article 24 (Limitation of Relief) under the India-Singapore DTAA.

The company notes it is not obligated to apply DTAA rates automatically; application depends on the completeness and satisfactory review of submitted documents.

TDS for Global Depositary Receipt (GDR) Holders

For GDR holders, tax will be withheld at 10% (plus applicable surcharge and cess) under Section 196C of the Act, if a self-attested PAN card is provided. If no PAN details are available, tax will be deducted at 20% (plus applicable surcharge and cess).

Crucial Deadline for Document Submission

Shareholders are requested to provide all necessary details and documents as mentioned above on or before Thursday, July 10, 2025 (cut-off period). Documents submitted after this date will be accepted at the sole discretion of the company. Failure to submit documents may result in TDS being deducted at default rates.

Additional Important Information for Shareholders

• PAN-Aadhar Linking: As per Section 139AA, PAN must be linked with Aadhar. Non-compliance can render the PAN invalid/inoperative, leading to TDS at 20% under Section 206AA. Shareholders can visit https://www.incometax.gov.in/iec/foportal/ for FAQs.
• Declaration under Rule 37BA: If dividend income is assessable in the hands of a person other than the deductee, the deductee must file a declaration with the company as per Income Tax Rules, 1962.
• Shareholders with Multiple Accounts: For shareholders holding shares under multiple accounts with different statuses/categories but a single PAN, the higher applicable tax rate will be considered for their entire holding.
• Submission of Tax-Related Documents: Tax-related documents (Form 15G/15H, etc.) should be submitted by July 10, 2025, to Cameo Corporate Services Limited via email (rani@cameoindia.com) or post (Subramanian Building, #1, Club House Road, Chennai – 600 002, India). Relevant forms can be downloaded from www.20microns.com (Investors → Communication With Respect to TDS). Submissions to any other address may not be considered.
• Viewing Tax Credit: Tax credit can be viewed in Form 26AS by logging into TRACES (https://www.tdscpc.gov.in/app/login.xhtml) or the e-filing website of the Income Tax Department (https://www.incometaxindiaefiling.gov.in/home) using valid PAN credentials.

Updation of Bank Account Details

Shareholders are requested to ensure their bank account details are updated in their respective demat accounts or physical folios for timely credit of dividends. SEBI circulars (SEBI/HO/MIRSD/POD-1/P/CIR/2024/37 dated May 7, 2024, and SEBI/HO/MIRSD/POD-1/P/CIR/2023/181 dated November 17, 2023) mandate that effective April 1, 2024, dividends to security holders in physical mode shall be paid only through electronic mode. Physical shareholders must furnish PAN, choice of nomination (optional), contact details (postal address with PIN and mobile number), bank account details, and specimen signature to the company or RTA.

The company has provided templates for Form 15G (Annexure 1), Form 15H (Annexure 2), Declaration regarding Category and Beneficial Ownership of shares (Annexure 3), and Declaration regarding Tax Residency and Beneficial Ownership of shares (Annexure 4) along with its communication to shareholders.